In any normal year, an accounting or tax firm is a combination financial expert, compliance high-wire walker, strategist, strategic genius, therapist, and factotum extraordinaire. This is not a normal year.
Coming in from the heights are the pandemic and ongoing supply chain issues, labor shortages, tax changes still to be seen from the 2017 code revamp, technology exploding apace, international war, energy shortages, growing climate change threats, and domestic political storms. Keeping a business, and personal financial life, on keel is far harder than usual. You need an honest sounding board for both.
“I ask clients, ‘What keeps you awake at night?” says Suzanne Forbes (no relation to Forbes Media), managing partner of Gainesville, Florida-based James Moore & Co., a member of our 2023 list of the best firms for both accounting and tax. The answer she gets from clients: “What could put me out of business?” But their real concerns need to be bigger and wider, she says.
“We spend a lot more time about their overall financial planning, retirement planning, estate planning, not just business planning,” Forbes says. “Is it time to diversify some of their wealth outside of their business? Sometimes they just won’t do it. You have to be realistic with it. That’s a conversation that’s newer, that we’re having with clients. As a financial advisor, my advice has to be you need to diversify.” Still, with more than 35 years in the accounting business, Forbes understands it’s hard for a business owner to move beyond “taking every penny they have and putting it into the business.” That’s why she tries to help with the bigger picture.
The details Forbes gets into reach beyond business planning to include a client’s overall financial planning, retirement planning and estate planning. “You have to be realistic,” she says. “That’s a conversation that’s newer, that we’re having with clients more than we used to have.” For that sort of advice, it takes more than a good firm. You need a great one.
For the fourth year, Forbes has partnered with market research company Statista to create a list of the most recommended firms for tax and accounting services in the U.S. (For more on the methodology, see the bottom of this story.)
Here are some of the issues these leading firms of all sizes, backgrounds, geographic regions, and types of clients mentioned in interviews.
Dodging a recession
Inflation, the tight labor market, and the Federal Reserve’s driving up interest rates to slow the economy — the interplay of these set the stage for a potential impending recession.
“This is one of those you can see or feel coming, so be prepared,” says Charles Weinstein, CEO of CPA firm EisnerAmper LLP and tax and business consultancy Eisner Advisory Group LLC. If cash is often called king, liquidity is emperor. “When you’ve got some uncertainty in inflation and pricing, when you have uncertainty in financing as it may impact your business, liquidity becomes that much more important. From the discussions we have with our clients, that’s what they’re focused on.”
Many are trapped because the experience of running short during the supply chain problems early in the Covid-19 pandemic led them to lay in extra. Now, the previous level of demand has dropped. “All the warehouses are full because no one’s buying and all that stuff that was [on freighters] on the water hit and it’s still sitting there,” says David Peterson, managing partner of Haynie & Company, which he describes as a “large firm [with] a small firm culture.”
“[Also,] labor costs have gone through the roof,” adds Forbes. “They’re looking at going to more automation because they can’t increase prices enough to keep up with costs.” The producer price index, a business’s counterpart to inflation, has frequently made the consumer price index look tame by comparison. For most, that doesn’t mean jettisoning people. “The clients I work with, they want to reduce turnover. They want people to have long-term careers with their company. That’s the rewarding part, where you see people able to accomplish things in their lives because of what you can do for them.”
Getting the people you want
“I think there’s still a problem with getting people, finding quality people,” Peterson says. There aren’t enough people. He says the accounting industry itself is short a million and a half students to come into the profession, a problem that other firms mentioned. “Possibly the job market is going to get back to some normalcy. I think that is what everyone is hoping for. I think cost of labor is going to rattle around in financial statements here for some time.”
While working from home has been an irritant to many a CEO, it’s also a way to broaden the potential labor pool and get the help you need. James Moore has more than 300 employees. “We have five physical offices, but with remote workforce we have employees in 17 different states,” Forbes says. Sometimes a thing that can seem inconvenient can become a brilliant aid. But it requires being flexible, and also supporting the regulatory complexities of having workers potentially all over the country.
Watching the stealth tax rule changes
The problem of regulations gets worse when they’re always changing, even in subtle ways. That’s particularly true with taxes. “Because we have somewhat of a lame Congress, we don’t envision major changes either way,” says Forbes. But lack of a congressional mandate doesn’t mean minor changes can’t surprise. The Tax Cuts and Jobs Act of 2017 is still kicking up some dust.
“One of the items is in depreciation deduction — called bonus depreciation,” Forbes says. “You could depreciate 100% immediately. Next year it drops to 80%, and then 60% the year after. Do they want to buy something in 22 or 23?” There are also changes to how companies can deduct interest and R&D expenses. “Some people think of accounting as history, but it’s also being proactive and thinking what the impact is going to be in the future.”
Don’t forget individual taxes. George Deal and Alex Franks, the dual partners of G&A Consulting Group, which practices in Virginia, Maryland, and the District of Columbia, work for many small businesses and self-employed people. Franks notes that some benefits of such passthrough structures as LLCs, partnerships, S-corporations, and sole proprietorships that were part of the 2017 law, are scheduled to run out soon. Will they get renewed? Or the new Schedule K2 and K3 that cover global income. “In the DC area, we came across a number of clients with foreign activity,” says Deal. Fail to file these schedules and you might face stiff financial penalties.
Finding a partner to face the future
Change is hard, especially when it comes quickly. Consider cryptocurrencies. “We probably did 30% more [tax returns with] crypto but none of them made any money,” Peterson says. “That’s what crypto has become, legalized gambling. You had these thousands of transactions, but it netted out to nothing.”
Or technology in general where the “impact is fast and furious,” Forbes says. “It keeps exponentially increasing” and becomes hard to deal with. She had been in a staff meeting earlier that day. “Some of them said, ‘I don’t like change, I want it to go back.’ I’m sorry, but it’s not.”
That may be the essence of what you want in a tax or accounting firm. Someone to tell when you can move ahead, and when you have to.
Methodology for this list
To create the list of America’s Best Tax and Accounting Firms 2023, the market research company Statista conducted broad surveys among CPAs, enrolled agents, tax attorneys, accountants, and CFOs between July 11 and September 2, 2022. Survey participants who worked for a tax or accounting firm could name up to ten firms for tax and ten firms for accounting that they would recommend if their company were not able to take on a client. Survey participants who worked in a company on the client side were asked to name up to 10 firms each in tax and accounting that they would recommend based on their professional experience during the last three years. Out of approximately 30,000 professionals invited to participate, about 4,500 recommendations were considered in the final analysis. The resulting lists “America’s Best Tax Firms 2023” and “America’s Best Accounting Firms 2023” are based on the number of recommendations received and additional company data. The quality of tax firms or accounting firms that are not included in the lists is not disputed.
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